Wednesday, March 14, 2018

"SEC charges Theranos and CEO Elizabeth Holmes with ‘massive fraud’"

Ya think?
From Engadget:

Holmes and Theranos have already agreed to settle.

The SEC has charged Theranos, Elizabeth
Holmes and Ramesh "Sunny" Balwani with fraud relating to the startup's
fundraising activities. The company, as well as CEO Holmes and former
president Balwani are said to have raised more than $700 million from
investors through "an elaborate, years-long fraud." This involved making
"false statements about the company's technology, business and
financial performance."

In a statement, the commission said that the company, and its two
executives, misled investors about the capability of its blood testing
technology. Theranos' big selling point was that its hardware could scan
for a number of diseases with just a small drop of blood.
Unfortunately, the company was never able to demonstrate that its system
worked as well as its creators claimed.

Theranos also apparently
claimed that its hardware was used by the US Department of Defense and
was deployed in combat zones. Investors were told that this deal, and
others, would help the company pull in $100 million in revenue in 2014.
Unfortunately, the DOD never used the equipment in combat zones and only
generated $100,000 in revenue during that year.

The company and
Elizabeth Holmes have already agreed to settle the charges leveled
against them by the SEC. Holmes will have to pay a $500,000 fine and
return 18.9 million shares in Theranos that she owned, as well as
downgrading her super-majority equity into common stock. The CEO is now
barred from serving as the officer or director of a public company for
10 years. In addition, if Theranos is liquidated or acquired, Holmes
cannot profit from her remaining shareholding unless $750 million is
handed back to defrauded investors....MORE